ONEOK quarterly profit falls as pipeline divestiture impacts gas segment earnings

Feb 23 (Reuters) - U.S. pipeline operator ONEOK OKE.N posted a fall in fourth-quarter profit per share on Monday, hit by a sharp drop in earnings in its natural gas transportation segment linked to the 2024 divestiture of an interstate pipeline network.

Shares of the company were down 2.8% in extended trading.

ONEOK also had to contend with low oil prices during the quarter ended December 31, as concerns about oversupply and tariffs outweighed geopolitical risks. Benchmark Brent crude LCOc1 averaged $63.13 a barrel during the period, down 11.3% from a year earlier.

Falling oil prices put pressure on midstream service providers such as ONEOK, shrinking pipeline transportation volumes as upstream drilling activity declines.

The Tulsa, Oklahoma-based company's earnings per share fell to $1.55 during the fourth quarter, from $1.57 a year earlier.

Adjusted quarterly core profit for the natural gas pipelines unit slid to $261 million from $417 million a year earlier. The divestiture of the pipeline network alone accounted for a $264 million decline, according to the company.

Quarterly adjusted core profit for its refined products and crude segment dropped about 6% to $567 million.

However, quarterly core profit for the company's natural gas liquids business rose 4% from a year earlier, while the natural gas gathering and processing segment recorded a 10% increase.

ONEOK expects current-year net income between $3.19 billion and $3.71 billion, the midpoint of which is below analysts' average estimate of $3.65 billion, according to data compiled by LSEG.

ONEOK transports natural gas, natural gas liquids, refined products and crude oil through its 60,000-mile-long network of pipelines.

The company has been diversifying its portfolio through acquisitions over the past two years, including a Gulf Coast NGL pipeline system from Easton Energy, as well as Medallion Midstream and EnLink Midstream.